The Dangers of DIY Wills
Not only can your do-it-yourself will be worth less than the paper it is printed on, it can cost your family far more in taxes and legal fees after your death than you ever would have spent having it properly drafted in the first place. See how one man's family discovered just how expensive preparing your own will can be.
The Story of Tony Sowder
In 1983, Tony Sowder, a keen businessman, sat down and wrote his own will. He never updated it, nor did he take it to an estate planning attorney to have it properly drafted before he passed away more than a decade later.
While Tony's intention, according to his wife, Marie, was to leave an estate free of estate taxes, the IRS had a different tax interpretation while processing the estate tax return and reviewing the language used in his will.
Typically a spouse can pass all of his or her assets to a surviving spouse estate tax–free through the use of the unlimited marital deduction. Unfortunately, Tony did not employ the legally correct wording to make use of the unlimited marital deduction.
So what happened?
- Because of this technicality, the IRS claimed that all of the assets passing to Marie would be subject to estate tax.
- Tony's estate had to pay $800,000 in estate taxes and more than $130,000 for the back interest owed on the deficient taxes.
- Tony's family went to court to fight the IRS. Although the federal court found in favor of the estate, it took 10 years to resolve the case and determine how much tax the estate really owed.
- The cost to Tony's family included not only the legal fees spent defending his will and nearly $1 million in taxes and interest, but also his family's investment of time and a decade of emotional strain.
How can you avoid making a similar mistake?
The moral of Tony Sowder's story about his self-made will is simple: Don't draft your own legal documents. Use a qualified estate planning attorney to create not only your will, but also your other important estate planning documents such as a revocable living trust, durable power of attorney, health care power of attorney and living will.
Contact Dale Zschoche at 719.238.7510 or firstname.lastname@example.org if you are interested in supporting the Air Force Academy through your will. Together, with your estate planning attorney, we can structure a gift that meets your goals.
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The information on this website is not intended as legal or tax advice. For legal or tax advice, please consult an attorney. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes apply to federal taxes only. State income/estate taxes or state law may impact your results.